Insurer American International Group is expected to announce a settlement with federal and state regulators requiring the company to pay $1.6 billion in order to settle charges covering a range of regulatory issues, according to reports.
The Securities and Exchange Commission and New York Attorney General's Office have been looking into violations that include improper accounting at AIG, along with bid-rigging and missed payments to state workers' compensation funds.
The company still faces shareholder lawsuits. In a separate probe, last week a former AIG executive was indicted in the SEC's investigation into the company's reinsurance practices.
The settlement is not expected to ban contingent commissions, though AIG will likely have to make complete disclosures about those payments in the future. The two investigating regulators will probably split the $1.6 billion and then distribute the funds to harmed AIG investors and clients, including state workers' compensation funds.AIG has already accounted for many of the problems addressed in the settlement. In May 2005, the company restated five years of earnings, reducing its net income by $4 billion, or 10 percent.
